Trading markets bouncing around as election nears

intrade2.jpgIntrade, the online prediction market, has been especially erratic, with the President's chances of winning falling to as low as 56 percent a few days ago before heading back up. (Democrats had been grousing that a single trader was buying Romney shares in order to alter market perceptions of the race, though Intrade denies that happened). At last check, Obama was back up to 63.6 percent, which is still a few points lower than other betting markets. So does any of this really matter? More to the point, how effective are these markets in correctly predicting outcomes? From the NYT's Nate Silver:
Differences between Intrade and the other prediction markets have persisted throughout much of the past two months. Intrade has consistently shown slightly more favorable odds for Mr. Romney than other prediction and gambling sites. According to Brandon Adams, a professional poker player and a teaching fellow at Harvard, Intrade's prices are not necessarily considered more reliable by professional gamblers. Mr. Adams says that Betfair and the sports book Pinnacle, both of which put Mr. Obama's odds at about 63 percent as of early Wednesday morning, feature more sophisticated market participants. However, Intrade is cited far more frequently by the American news media. That at least opens up the possibility that someone could place a wager on Mr. Romney (or Mr. Obama) at Intrade in order to influence the news media's perceptions about which candidate has the momentum.

More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAX
Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent Campaign 2012 stories:
Cost of Berman-Sherman campaign: $16.3 million
Now that's close: Measure J falls 0.56 percent short
Santa Monica mayor resigns, heads to Sacramento
Measure J edges closer to (but not over) 2/3
Richard Bloom's lead grows in Westside Assembly race

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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